Mortgage Tips - The Biggest Financial Tip To Help With Your Mortgage — Budget!

Many people are struggling to pay off their mortgage, car, insurance, furniture, utilities, groceries and other monthly expenses. Compound that with expenses on families such as education, medical and other surprise costs that always seem to come out of the blue at the wrong time, and it can be maddeningly difficult to climb the financial ladder. Worse, just when you think you are out of the frying pan, you often land right in the fire as another unexpected expense broadsides you out of nowhere.

But there is an easy and effective way to eliminate all these problems and stay current on your mortgage. It’s not a miracle fix and it’s not going to let you pay off your mortgage all at once. It’s also certainly not the latest “get rich quick” scheme, or advice to buy lottery tickets and pray to whatever god, force or power you believe in. No, it’s none of this nonsense! It’s as simple as keeping a budget.

But what exactly is a budget?

To be able to pay off your mortgage and other expenses in time which will reduce stress, you need to understand exactly what a budget is. Many people have some vague ideas about what a budget is, but they do not understand the fundamental principle behind it.

The first point of a budget that you need to understand is that you MUST give a task to every single dollar that comes into your house. You can make your life much simpler by searching and purchasing a budgeting software or if you’re good with Excel, then creating your own budget that does all the calculations for you. Either way, whatever software you use (even if you just use an accounts book and write down your mortgage payments, utilities and income by hand), you absolutely must record every dime and nickel that comes into the household.

Give the dollars a task!

The next crucial step to freeing yourself from mortgage miseries is to give every single dollar that you earn a task. For some people the equation is easy, because they get paid once a month. For people who run a business or work freelance, it can be tricky, but the point is to record everything you get and as soon as you get it give that money a job to do. The point of the budget is to allocate your resources in a way that there is a clear plan that you can stick to and in the long term — save.

The first goal

Your first goal with any budget you start is to get together at least three months living expenses as soon as possible. Therefore, for the first few months of your budget while making your mortgage payments, groceries and other expenses, try living a bit more frugally and put aside an amount every time you get money that slowly builds towards this three month buffer zone. Once you have your buffer zone of cash, dump it in a high savings interest account and forget about it.

By doing this, you will have taken the first step towards financial freedom from your mortgage and will not only have covered for future emergency expenses, but you can start spending your extra money elsewhere.

Financial Tips on Securing a Mortgage

Many people are on the lookout for a great mortgage, especially when they are just starting out in life. If you are new to the world of bills, credit, banks and finances because you’ve just finished college or you are settling down after having gotten married, then it can be quite difficult to secure credit for a mortgage. Banks and other lending institutions simply do not have enough of a credit record that they can look up to see whether they can trust you with a loan.

Even if you have a great job with a regular salary, if you do not have a credit history of paying bills that can be verified, you will find it difficult to secure a mortgage. And it’s not just people who are new to the world of credit that have difficulty with this, but in this day and age more and more people are becoming mobile and moving to different parts of the world. If you are just starting out as a migrant worker or a student living in another country, even if you have finances in the bank and a good income, you might need to wait for a while before you can successfully apply for a mortgage.

Time will help you

The fundamental piece of advice to keep in mind when looking to secure a mortgage that with time, even the worst credit rating (or no credit rating) can be fixed. At most, it should not take you longer than 1-2 years on average to prove to the banks that you are worth trusting with a mortgage and many people find that it can even take less than a year in some cases.

How to speed the process up?

That’s not to say that you should wait around hoping that it will sort it out by itself. There are fundamental things you can do, apart from the basics such as paying all your bills on time and having a regular salary, which will speed up the process of becoming eligible for a mortgage.

Perhaps the biggest step you can take is to open a high interest savings account at your bank (or at another bank to vary your financial portfolio — always a plus point) and to make regular and consistent deposits into it every month. Not only will you gain extra money as long as you do not touch this and let the interest keep growing, but you will increase your value and will be able to use it as a down payment on the mortgage later on.

Another good step you can take to speed up your credit rating improvement is to buy small things with your credit card and regularly pay the bill on time and promptly. Some people for instance designate that they will use their debit cards to pay for groceries and household items, while if they go out to restaurants or other entertainment they use their credit card. This will give you an extra bill to pay every month that you can use to boost your credit rating in the long run and allow you to qualify for a mortgage faster.